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May 16, 2006

Italy’s Prodi finally on verge of gaining power

by Sam Savage

By Nelson Graves

ROME (Reuters) - Italy's new president began a day-long
round of consultations with political leaders on Tuesday that
will enable Prime Minister-in-waiting Romano Prodi to form a
government and end a prolonged political vacuum.

The day after he was sworn in as Italy's first ex-communist
president, Giorgio Napolitano started meeting a stream of
politicians at the ornate Quirinale palace in the first of a
series of steps that will end with Prodi taking power.

Napolitano was expected to ask the 66-year-old centre-left
leader as early as Tuesday evening to form a government, with
Prodi's swearing in and the announcement of his cabinet
probably set for Wednesday, coalition leaders said.

"I will be ready," Prodi told reporters, saying he hoped
Napolitano would offer him the mandate later on Tuesday.

But Prodi, the target of intense lobbying by his
coalition's many parties for electoral spoils, still had not
put the final touches on his cabinet choices.

Asked if a late-night meeting of coalition leaders on
Monday had resolved residual problems, Prodi said: "The last
ones, no, but the next to last ones, yes."

Prodi's path to power has been delayed, first by a recount
of disputed ballots in the closest election in modern Italy,
then by the transition between heads of state, whose limited
powers include naming prime ministers and approving cabinets.

If all goes according to Prodi's wishes, his government
will be set by Wednesday, he will win a confidence vote in the
Senate by Friday and another one in the lower house early next
week.

That would allow him to assume full power six weeks after
the April 9-10 election that ousted Silvio Berlusconi after 5
years in office -- the longest stint in post-War Italy.

CORE PROBLEM

Prodi's wafer-thin majority -- by only 2 seats in the
Senate -- has raised questions about how long he can keep a
coalition bridging centrist Catholics and committed communists
in power.

A poll in Corriere della Sera newspaper highlighted voters'
contrasting views of Prodi, who is nicknamed "Professor," and
Berlusconi, who has promised an combative opposition.

Prodi received high grades for competence and honesty --
but trailed Berlusconi in perceived leadership skills.

Prodi appeared finally to have decided on two deputy prime
ministers -- Massimo D'Alema, chairman of the Democrats of the
Left party who is tipped to be foreign minister as well, and
Francesco Rutelli, leader of the centrist Margherita (Daisy)
party.

But key ministries including interior, defense and justice
were still up for grabs, newspapers said.

One of Prodi's biggest early challenges will be to contain
Italy's budget deficit, which is well above the European
Union's ceiling, and stimulate an economy that failed to post
any growth in two of the last three years.

Two debt ratings agencies have said they will downgrade
their ratings unless Prodi quickly produces a strategy to
improve the books and boost Italy's dwindling competitiveness.